from the well,-implicity dept

You may recall that back when AT&T was trying to buy T-Mobile, a big part of the argument was a spectrum crunch around its wireless efforts. The company insisted -- strenuously -- that it would not be able to expand 4G LTE services to more than 80% of the population unless it had T-Mobile. That argument ran into some trouble when a lawyer accidentally posted some documents to the FCC which admitted that the company could fairly easily expand its coverage to 97% of the population of the US without T-Mobile (and, in fact, that it would cost about 10% of what buying T-Mobile would cost). Suddenly, the argument that it absolutely needed T-Mobile rang hollow -- even as the company continued to insist exactly that. Still, the FCC suddenly was skeptical and AT&T, seeing the writing on the wall, gave up on the merger.

So, it probably shouldn't have been seen as much of a surprise that just 11 months after the T-Mobile deal fell through, AT&T has announced plans to expand its LTE footprint to cover 97% of the population of the US. In other words, the internal document was exactly correct, and AT&T's public claims? Hogwash.

Even the mainstream news media is now mocking AT&T's obviously bogus claims during the merger fight. AT&T's response to this is to claim that it "chartered a new direction," doing something like 40 new deals for spectrum. However, as Broadband Reports notes, all of this seems to make clear that there is no spectrum crunch -- that's just a bogeyman story that the telcos tell the government when they want a handout. In fact, AT&T is now saying publicly that there is no spectrum crunch. It has more than enough.

Speaking to analysts, AT&T's chief strategy officer John Stankey yesterday acknowledged the company is now well-positioned on the spectrum front -- even before the company starts moving on their new plan to use WCS spectrum for LTE deployment.

"Even under ideal circumstances, getting new spectrum on the market in the next five to seven years is aggressive," Stankey said. "But what we do know is that AT&T is well-positioned now...These deals give us confidence that we can meet our LTE objectives for next two years and they will allow us to deliver competitive performance."

Of course, I'm sure the next time AT&T needs something from the government, or wants to wipe a competitor off the map, we'll be right back to that story about how they're in desperate need of spectrum.

from the tap-tap-tap dept

I'm still not convinced the FCC really has the mandate to put in place net neutrality rules, but even so, it's quite amazing to watch AT&T try to tap dance around them, while clearly violating both the spirit and the letter of the policies. The latest issue has to do with Apple's Facetime video chat. While earlier rumors that AT&T would charge for using the app proved untrue, it did announce that the app would only be available for those paying for a higher level of service (which may effectively be the same thing). The usual parties quickly raised a stink, highlighting how AT&T appears to be violating the rules:

AT&T has now hit back, claiming that the complaints are "knee jerk" and they're not doing anything wrong.

As far as I can tell, AT&T's defense is two-fold:

It believes that there is a loophole in the net neutrality rules in that it does not apply to preloaded apps, and they can set whatever access rules for such apps that they want:

The FCC’s net neutrality rules do not regulate the availability to customers of applications that are preloaded on phones. Indeed, the rules do not require that providers make available any preloaded apps. Rather, they address whether customers are able to download apps that compete with our voice or video telephony services.

It believes that as long as some other competing apps are available, they can restrict the apps they want to restrict.

AT&T does not restrict customers from downloading any such lawful applications, and there are several video chat apps available in the various app stores serving particular operating systems. (I won’t name any of them for fear that I will be accused by these same groups of discriminating in favor of those apps. But just go to your app store on your device and type “video chat.”) Therefore, there is no net neutrality violation.

That's a very interesting interpretation of these things, but doesn't just create a loophole, it creates a giant vortex through which AT&T could restrict a huge number of apps just by pointing out that other such apps exist -- even if they're awful and no one uses them.

Of course, all of this is why we've argued for nearly a decade that the whole "net neutrality" fight is a red herring, anyway. The telcos are always going to find their own loopholes and ways around the rules (which they helped create anyway). The whole fight over net neutrality is not the problem. It's a symptom of the real problem: a lack of serious competition in the marketplace. Get more competitors out there, and increase the fight over customers, and AT&T can't get away with such moves.

from the or,-time-to-find-another-carrier dept

One of the main concerns of those who worry about net neutrality is how a network provider might block or charge extra for competing services. For example, telcos who still make a fair bit of money from voice services might not like competing services like Skype. Or... Apple FaceTime. So it's interesting to see a report from 9to5Mac suggesting that AT&T may be planning to charge extra to use FaceTime over cellular. This came out when testing iOS6 and receiving a popup requiring "activation." Here's the screenshot of what 9to5 saw:

This does not absolutely mean that they're going to charge. Currently, FaceTime only works over WiFi, but iOS6 is set to enable it for cellular. It's possible that this popup is just because iOS6 is still in beta, and it's just a generic message for a service that is not yet available. But it's at least raising concerns about the intentions of AT&T, with groups like Free Press already warning that this would violate existing (if contested) FCC rules on net neutrality (which, it should be noted are very, very limited when it comes to mobile services). To be honest, I'm not sure why AT&T would actually go down this path. It's already trying to cap and/or meter mobile bandwidth, so it already has a natural restriction on usage. Furthermore, since the iPhone is now widely available on other platforms, charging extra for FaceTime seems like a perfect strategy for driving iPhone users to other mobile operators.

from the you-have-no-privacy dept

We've talked for a while about just how often law enforcement seeks information from mobile operators -- often without getting any actual warrant -- knowing that it was astounding. But after an article from a few months ago in the NY Times noting that it was both routine and a big business for mobile operators, who charge law enforcement for each request, Rep. Ed Markey asked all of the major mobile operators just how often they get requests from law enforcement for subscriber info, and discovered that last year they responded to an astounding 1.3 million requests for subscriber info -- including location info, text messages and other data. And, apparently, this number likely undercounts the true size, because it notes that there was "incomplete record-keeping" in some cases. Oh yeah, and also, this just requests, not individuals -- a single request might include multiple people whose information was being sought. So, an awful lot of people were spied on this way.

Not surprisingly, the number of requests continues to rise drastically, with AT&T admitting that it had seen a tripling in requests in the last five years. As the report notes:

AT&T alone now responds to an average of more than 700 requests a day, with about 230 of them regarded as emergencies that do not require the normal court orders and subpoena.... Sprint, which did not break down its figures in as much detail as other carriers, led all companies last year in reporting what amounted to at least 1,500 data requests on average a day.

This isn't a huge surprise, but does raise significant questions about how reasonable these information trawling operations are. Do we honestly believe that law enforcement needed all of that info? This seems like a case where, of course, if the info is easy to get, law enforcement wants it. But is that reasonable?

And, telcos have little incentive to stand up for the rights of their users. They actually make money from these kinds of requests:

AT&T, for one, said it collected $8.3 million last year compared with $2.8 million in 2007, and other carriers reported similar increases in billings.

For a company that large, this isn't a major cash cow, but it is something. It's unclear how carefully the telcos review the request. At least one (smaller) telco, C Spire Wireless, reported that it had rejected about 15% of the requests, but most of the other operators didn't provide any info on rejections (and it makes you wonder if they ever rejected any requests at all).

None of this is surprising. When such a tool is available, it's almost impossible for it not to be abused. It's just too easy for law enforcement to snoop on anyone's location or text messages, and they can't resist doing so. It seems like telcos (1) could be a lot more transparent about this. While Google and Twitter both have voluntarily opened up to provide data on law enforcement requests, the only reason this info became public from the mobile operators was because of Markey's request. On top of that, it seems that the rules concerning an individual's privacy rights should also be a lot clearer, to give the telcos more ammo to push back against bogus requests.

from the playing-dirty dept

As you may have heard over the last couple months, AT&T has gone to war with customers who bought its "unlimited" data plans. While the company no longer offers such plans, existing users were grandfathered in. And they like those plans. AT&T, however, would prefer to move them over to tiered plans under which they'll pay more. So it began throttling their connections. If they were using a fair amount of data (really not that much), it slowed their connection down to the point of being basically useless. This is a pure bait-and-switch tactic, where the company sold customers something that it then failed to deliver.

A guy named Matt Spaccarelli felt that this was a clear breach of contract and sued in small claims court... and won $850 ($85 is his monthly fee, and the judge felt that there were 10 months left on the contract that was violated... so, $850). Spaccarelli then also set up a website with all the details, so that others could file their own lawsuits. Apparently, AT&T is none too pleased about this and is playing hardball with the guy, threatening to cut off his phone service after determining that he used the phone to tether.

Separately, they're trying to "settle" with him, but are pissed off that he's been public about the settlement attempts so far, as the key thing in the mind of AT&T lawyers and execs is getting a gag order in place to stop others from going down the same path. Of course, there's no requirement that Spaccarelli settle or agree to any gag order, and it sounds like he's not planning to:

Spaccarelli has posted online the documents he used to argue his case and encourages other AT&T customers copy his suit. Legal settlements usually include non-disclosure agreements that would force Spaccarelli to take down the documents.

In its letter, AT&T asked Spaccarelli to be quiet about the settlement talks, including the fact that it offered to start them, another common stipulation. Spaccarelli said he was not interested in settling, and forwarded the letter to The Associated Press.

from the that's-chutzpah dept

After years of not suing anyone (but always threatening that it might, someday), Intellectual Ventures has become more and more aggressive of late in suing lots of companies. A few weeks ago it sued AT&T, Sprint and T-Mobile over a bunch of patents that (of course) involved some of IV's favorite shell companies. Just as it was preparing this lawsuit, a VP from IV went public with an attempt to argue that all this litigation is a sign of innovation at work. The article is rather shocking in how it presents its argument. It mainly relies on false claims that correlation means causation, concerning historical periods of innovation and lawsuits over patents. Of course, what it ignores is that the patent fights often come right after the innovation, not before. In other words, the patent battles aren't a sign that innovation is working. Rather it's a sign of patent holders freaking out that others are innovating. It's entirely about hindering innovation, not helping move it forward.

M-CAM also questions the claims that these lawsuits have anything at all to do with innovation, and hint at more nefarious reasons for the use of a bunch of shell companies:

Is IV’s patent litigation helping inventors or investors? Considering that the bulk of the patents in suit were each “acquired” from what the USPTO characterizes as a “merger” with a different relatively unknown LLC, we’ll let you decide. Seems to us that it simply represents an attempt to use opacity and “hidden weapons” for a tactical assault having ABSOLUTELY NOTHING to do with innovation. In fact, these kinds of structures are also typically employed for tax “optimization” which is to say, to avoid paying taxes for any economic gains resulting from a successful assault, ahem sorry again, we mean “settlement”.

By the way, you may have noticed that Verizon is conspicuously absent from the list of mobile operators being sued here. That's because Verizon paid the entrance fee and is a "member" in the IV club... which apparently only cost the company $350 million. Oh yeah... and it then became an enabler. One of the patents in the new lawsuit... once was owned by Verizon.

from the ignoring-how-the-internet-already-works dept

Some of you youngsters may not remember what really kicked off the big "net neutrality" fight over the past few years. It was back in 2005, when then AT&T CEO Ed Whitacre suggested that internet companies should pay a second time to reach users. This was particularly nefarious. What Whitacre was suggesting was actually that AT&T get to double charge everyone. That's because the way it was (and still) is that everyone pays for their own bandwidth -- including the big internet services like Google. However, the way Whitacre was describing it, the bandwidth you got only paid for half the transit. That is, you only paid for your bandwidth from your premise to "the cloud" but not back out to any end machine. That that bandwidth was paid for by whoever owns those end machines was entirely ignored. So the plan was not just that Google would pay for its own bandwidth, but that Google would also pay for your bandwidth to get Google to your computer (ignoring that you already paid for it).

That didn't go over so well with people, and got particularly ridiculous when Mike McCurry, running an AT&T lobbying effort, insisted that Google didn't pay a dime for its bandwidth. For rather obvious reasons, he refused my proposition that he agree to pay Google's bandwidth bills.

Either way, it appears that the brilliant minds at AT&T have been trying to devise a new way to present such a plan that doesn't leave them so open to charges of being greedy double chargers -- and they may have found it by focusing on the mobile world, with their new love of "tiered" and "capped" plans that limit how much bandwidth you actually get. What they're going to do is charge app makers a fee to offer their services to you in a way that the data doesn't count against your cap. They describe it as an "800 number for the mobile internet."

"A feature that we're hoping to have out sometime next year is the equivalent of 800 numbers that would say, if you take this app, this app will come without any network usage," Donovan said on the sidelines of a mobile-industry conference here. It's far from clear how willing technology companies would be to pay wireless carriers for data use. Mr. Donovan said there was interest from companies who could use the feature to drum up new business from customers wary of using data-heavy services like mobile video.

This is nefariously brilliant. People associate 800 numbers with toll-free phone calls, so it's kind of like that... except it isn't anything like that at all. It's just a way to get companies to pay for the data connection you're already paying for. But the end result is exactly like what Whitacre wanted five years ago: get the app providers to pay double for bandwidth. Karl Bode summarizes the whole ridiculous plan as only he can (via that link above):

The end result is the same, with AT&T imposing bizarre tolls on content companies to obtain preferred customer status, picking winners and losers while retaining power in the wireless ecosystem.

It's an idea we're sure AT&T will pitch as a cost-saving endeavor for consumers, but given this is AT&T, you'd be naive to think cost savings will be in the equation. You'll still pay the same data rates, content companies will now just pay a fee to obtain preferred "reduced cap impact" status, then pass the higher development costs on to you. It's a ridiculous and dangerous idea, and the fallout will likely be similar to AT&T's "free ride" comments. AT&T executives either don't care how bad these ideas make them look, or don't realize it thanks to too many isolated meetings at headquarters packed with telco-think yes men.

Eventually you start to think that AT&T executives should just stop thinking before they hurt someone or themselves. If AT&T put half as much energy into running a top-flight network with quality support as they did cooking up hare-brained troll toll schemes -- they might just stop coming in last place in all major customer satisfaction studies.

This is really just another reason why the telcos are pushing so hard to move users into unnecessary tiered plans -- because they can't pull off scams like this on unlimited data plans nearly as easily.

from the it's-all-about-the-$$$ dept

Of the four national mobile operators, only Sprint still offers an "unlimited" data plan -- and most industry watchers expect that to go away soon. When the operators talk about this stuff, they complain about how unlimited plans are abused and the amount of data being used by so-called "data hogs" is crippling network bandwidth. Of course, the alternative story is that they just want to charge people higher rates, and putting a toll booth on data usage makes that possible. A new study by Validas confirms that the latter theory seems to match with reality. The company looked at 11,000 mobile phone bills of users on both throttled (tiered) plans and unlimited data plans and found... data usage was effectively the same. In other words, for all the talk about how tiers and throttles are needed to stop bandwidth hogging... reality shows that these plans have little impact on actual data usage. Or, to put it really simply: these plans are all about the mobile operators making more money and have nothing to do with network capacity.

Of course, as I've argued in the past, this is a pretty short-sighted strategy by the mobile operators. While they have every right to set up whatever business models they want in order to maximize profit, this might come back to haunt them. The problem with a tiered or throttled data plan is that it actually makes the mobile data service less valuable. Not only does it cost more for the same usage, it adds mental transaction costs as users have to keep track of their usage. That's only going to make people value alternatives much more. The carriers can get away with that if there are no alternatives (as is the case some of the time), but as more alternatives hit the market, expect people to shift their usage to networks they can actually use without fear.

from the wow dept

This is definitely a surprise, but it looks like AT&T finally read all the writing on the wall, and realized it was unlikely to win its fight with the DOJ and FCC and has officially killed its plan to try to purchase T-Mobile... meaning that it now has to pay the $4 billion breakup fee. While the trend of where this was heading was becoming increasingly obvious over the past few months, it's still pretty shocking on the whole. Getting big mergers like this through had become pretty standard, and AT&T (especially) excelled at the political dealing to make such things work. However, the growing public outcry and concerns over the lack of competition that would result seemed to finally have had a real impact.

from the it'd-be-a-great-racket-if-it-wasn't-for-these-stupid-customers dept

About a year ago, various wireless service providers found themselves under investigation by the FCC for sky-high overage fees. Of course, they protested this charge in the form of hilarious statements, expressing "concern" that their customers might be "confused" if they were warned about impending overage charges. Some even went so far as to claim that customers obviously wanted overage charges because (get this) customers racked up overage charges.

To wit:

"For accounts that repeatedly go into overage, it is reasonable to infer that it is a matter of consumer choice. These customers are either indifferent to overages or are making the deliberate decision to incur overages because it is the most cost-efficient solution for their usage patterns."

Or maybe, just maybe, customers wanted to be informed of these possible overage charges but no cell phone company was interested in telling them. While tools are available for consumers to track their own usage, this is not something that's promoted very heavily (or indeed, at all) by most phone companies.

Customers will receive free text alerts in real-time when they're about to exceed their limits, CNET reports. The move is supposed to cut down on the "bill shock" people may feel when hit with sky-high rates for extra usage. Wireless carriers will also warn customers who travel overseas about the additional fees they may incur.

Of course, this being a government-related decision (and one performed under presumable duress), don't expect to be notified any time soon.

Under the volunteer measures, wireless carriers have 18 months to put their warning systems in place.

Not only that, but your months-away warnings may not be timely enough, especially for those of you with notorious text-fiends (read: teenage children) on your mobile plans.

Some providers, including AT&T and Verizon Wireless, already warn their customers as their data use approaches the limit. However, these warnings may be delayed. AT&T, for example, takes 24 hours.

24 hours?!? That's like 3 years of texting for normal users! The good news is that sometime within the next two years, your mobile carrier may have to speed up its notification system to something approaching "real time."

Until then, you may want to consider switching to an unlimited plan or putting your kids up for adoption, whichever is cheaper.